The following is the information obtained during the audit activities in Byoo Bhd and its subsidiaries...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The following is the information obtained during the audit activities in Byoo Bhd and its subsidiaries company for the financial year ended 31 March 2021. 1. During the audit, the team discovers that one of the five development projects, valued at RM780,000 and included as intangible assets, does not meet the criteria for capitalisation. Mr. Tung, the finance director does not intend to change the accounting treatment adopted as he considers this an immaterial amount. 2. During the audit of highway construction in Kuantan, it was an error in the valuation of work in progress, as a number of the assumptions contain out-of-date information. Mr. Ahmad Syawal, chairman of the board committee has indicated that they do not wish to amend the financial statements. 3. After the date of the financial statements, as part of the subsequent event audit procedures. it was discovered that one of the client's two uninsured plants was damaged due to a recent fire. The newspapers described the event in detail but the financial statements and appended notes prepared by the client did not disclose the loss caused by the fire. 4. In the current year, for the first time, the current ratio is below 3:1, which is below the minimum requirement specified for a major loan agreement in Ambank Bhd. This ratio value could represent doubt about the ability of May Bhd., one of the subsidiaries to continue in operation for the next year. 5. The financial controller, Mr. Shamsul will not allow the auditor of Byoo Bhd. to confirm the accounts receivable balance from two of its major customers. The amount of the accounts receivable is material in relation to Syoss Bhd's financial statements. The auditor is unable to satisfy himself with regards to the accounts receivable balance by other procedures of this related party transaction. Required: b. Critically examine the subsequent events and their effects on the financial statement of Byoo Bhd. and its subsidiaries as of 31 March 2021. (25 marks) Describe the risk associated and audit procedures with the related party transaction in Byoo Bhd. and its subsidiaries as of 31 March 2021. (15 marks) The following is the information obtained during the audit activities in Byoo Bhd and its subsidiaries company for the financial year ended 31 March 2021. 1. During the audit, the team discovers that one of the five development projects, valued at RM780,000 and included as intangible assets, does not meet the criteria for capitalisation. Mr. Tung, the finance director does not intend to change the accounting treatment adopted as he considers this an immaterial amount. 2. During the audit of highway construction in Kuantan, it was an error in the valuation of work in progress, as a number of the assumptions contain out-of-date information. Mr. Ahmad Syawal, chairman of the board committee has indicated that they do not wish to amend the financial statements. 3. After the date of the financial statements, as part of the subsequent event audit procedures. it was discovered that one of the client's two uninsured plants was damaged due to a recent fire. The newspapers described the event in detail but the financial statements and appended notes prepared by the client did not disclose the loss caused by the fire. 4. In the current year, for the first time, the current ratio is below 3:1, which is below the minimum requirement specified for a major loan agreement in Ambank Bhd. This ratio value could represent doubt about the ability of May Bhd., one of the subsidiaries to continue in operation for the next year. 5. The financial controller, Mr. Shamsul will not allow the auditor of Byoo Bhd. to confirm the accounts receivable balance from two of its major customers. The amount of the accounts receivable is material in relation to Syoss Bhd's financial statements. The auditor is unable to satisfy himself with regards to the accounts receivable balance by other procedures of this related party transaction. Required: b. Critically examine the subsequent events and their effects on the financial statement of Byoo Bhd. and its subsidiaries as of 31 March 2021. (25 marks) Describe the risk associated and audit procedures with the related party transaction in Byoo Bhd. and its subsidiaries as of 31 March 2021. (15 marks)
Expert Answer:
Answer rating: 100% (QA)
b Critically examine the subsequent events and their effects on the financial statements of Byoo Bhd and its subsidiaries as of 31 March 2021 1 The discovery that one of the development projects does ... View the full answer
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
Posted Date:
Students also viewed these accounting questions
-
It is 1 July 20X5. You work in the audit department of Saul & Co. The Goodman Group (the Group) is an audit client of your firm and the audit for the financial year ended 31 December 20X4 is in...
-
Your firm is appointed as GreenTech (GT) Berhads external auditor for the year ending 31 March 2021 which is the first year of statutory audit. GT Berhad manufactures hybrid cars and electric...
-
The case company is JUMBO Group Limited and its subsidiaries ("the Group"). The Group has a portfolio of several F&B brands including its anchor brand, JUMBO Seafood, operates 4 Tsui Wah Hong...
-
Listing 8.4 checks whether a solution is valid by checking whether every number is valid in the board. Rewrite the program by checking whether every row, every column, and every small box has the...
-
Derive the nodal finite-difference equations for the following configurations. (a) Node m, n on a diagonal boundary subjected to convection with a fluid at T and a heat transfer coefficient h. Assume...
-
1. What is meant by the expectations gap? 2. How might it be bridged? 3. What is meant by revenue? 4. What is meant by revenue recognition?
-
How to draft an answer to a complaint?
-
The two speakers of a boom box are 35.0 cm apart. A single oscillator makes the speakers vibrate in phase at a frequency of 2.00 kHz. At what angles, measured from the perpendicular bisector of the...
-
Rakuten Co establishes the following standards for the costs of 1 unit of its product. The standard production overhead costs per unit are based on direct-labor hours. Calculation for standard per...
-
Assume that: Johnstone and Joleen Straw each own 50% of the issued shares in the company. The Straws are to be assessed for taxation purposes in the current financial year as a small business on the...
-
Water is moving at a velocity of 3 . 0 0 m / s through a hose with an internal diameter of 1 . 2 0 cm . What is the volume flow rate in liters per minute? ( 1 m 3 = 1 0 0 0 Liter, 1 min = 6 0 s )
-
Shah Gill has been receiving phone calls from his creditors. He has 3 credit card with balances of $5,000 and a car loan with a balance outstanding $15,000. He does not have enough money each month...
-
1. 2. 3. Step 2: Create a New Thread for Your Initial Post by Wednesday at 11:59pm EST Respond to the following prompts in your initial post: Describe the strengths and weaknesses of the sender's...
-
Find the velocity (t) and speed ||t)|| of a particle whose motion is described by x=12 10t+25, y=413-3012, y = 413-3012, z=7 v(t) = ||v(t) || =
-
Provide an example of a health communication message that illustrates culturally competent communication. How did this message address cultural values or health beliefs for the intended audience?
-
5. A lender wants to achieve a yield (YTM or IRR) of 7.25% on a 25-year amortization, monthly-payment loan with a 10-year term (i.e. maturity) with balloon. How many points must the lender charge...
-
Suppose you have recently accepted a new job and are setting up your retirement allocations within the firm's 401k plan. The plan options contain two risky mutual funds, A and B. You may assume that...
-
On January 1, 2018, Khalid Ltd., which follows IAS 17, entered into an eight-year lease agreement for three dryers. Annual lease payments for the equipment are $28,500 at the beginning of each lease...
-
The directors of Chekani plc, a large listed company, are engaged in a policy of expansion. Accordingly, they have approached the directors of Meela Ltd, an unlisted company of substantial size, in...
-
(a) A concession company, WaterAway, has completed the construction of a wastewater plant. The plant will be transferred to the public sector unconditionally after 25 years. The public sector (the...
-
River plc acquired 90% of the common shares and 10% of the 5% bonds in Pool Ltd on 31 March 20X1. All income and expenses are deemed to accrue evenly through the year. On 31 January 20X1 River sold...
-
An important measure of profitability is a. inventory turnover. b. quick (acid test) ratio. c. return on assets (ROA). d. net sales.
-
Which item among the following is not an intangible asset? a. A trademark b. A copyright c. A patent d. All of the above are intangible assets
-
In 2020, return on assets for JBC Company has increased. This means that the a. company has become more effective. b. company has become more efficient. c. company has become more effective and more...
Study smarter with the SolutionInn App